The Securities and Exchange Commission (SEC) is considering taking legal action against Wachovia, the fifth-largest US bank, over stock trades by the bank and its employees and over improper mutual fund trading.
The possible actions relate to two separate investigations, Wachovia said in a regulatory filing lodged yesterday.
The bank had already revealed the SEC was looking into the stock trades, which were made at the time of Wachovia's merger with First Union in April 2003.
Wachovia said the SEC told it on July 23rd that enforcement action might be taken against the bank and against several of its officers.
Wachovia said it would write to the SEC to "vigorously defend" itself against the allegations and outline why no action should be taken. It believed "all such \ purchases and disclosures complied with applicable law".
After First Union announced it would buy Wachovia in 2001 in a $12.7 billion stock offer, SunTrust launched a rival bid. Wachovia then bought more than $500 million in First Union shares in a move that boosted First Union's stock price and had the effect of helping stave off the SunTrust bid. The SEC action appears to relate to those purchases.
Wachovia said it would also fight SEC legal action over mutual fund trading. It had reported that its Evergreen fund unit had, along with about 100 other fund companies, received a subpoena from regulators over fund trading. - (Financial Times Service)
